Did you know we been charge extra on our billing with tax?

SOLVED
Helpful Neighbour

Did you know we been charge extra on our billing with tax?

Hi Everyone

 

Have you check notice the charges on tax is wrong? we been getting charge extra for the past few months! If you haven't you should and let Telus hear your voice.  They told me was system error and should be resolve but they haven't.  You should double check especially if you live in Alberta. 

Etown

1 ACCEPTED SOLUTION
Friendly Neighbour

I just spent two hours with Telus. Telus is calculating the tax based on the original price rather than the discounted price. 

 

My previous internet bill was $60 and reduced to $45 since September. The taxes are still calculated based on $60.

 

Companies charged customers GST on the full amount of the telephone bill before applying the billing credit, because they tried to claim input tax credits (ITCs) for the billing and reduced their expenses.

 

 - CRA's coupon rules (ETA paragraph 181(3)(b)) allows a company to claim ITCs for the tax fraction (for example, 13⁄113) of a coupon. However, the credits on the phone bill are NOT COUPON.

 

- CRA's rebate rules (ETA section 181.1) also allows a company to claim ITCs for the tax faction of a rebate. However, the credits are not rebate and they are simply a discount offered when customers signed up for a two-year plans.

 

Our tax system imposes tax on the value of the consideration for the supply, ensuring tax is exigible on the net consideration an end consumer pays. The companies charged tax before calculating the discount violate our tax acts. 

 

Talking to online customer representatives and phone representatives won't help.  I had tried to find an email address so I can email to Telus. But no, they don't have one. Hope the Telus employees can see the posts here and find a solution for us.

 

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78 REPLIES 78
Resident

I just discovered the overcharging of GST and PST on my recent Telus bill and found that it started around December after negotiating some discounts to my phone and internet bundle in late November. As I'd negotiated for discounts with Telus before, I was a bit surprised that this time I received in the mail, a multi-page "Customer Service Agreement" and "Order Summary" detailing the discount and credits they applied.

 

When I called Telus customer service, the rep I spoke to, after consulting with a manager (I assume), said the discounts are deducted from the total balance BEFORE taxes are calculated but credits are applied to the total bill AFTER tax is calculated. Doing the tax calculations for both PST and GST added up correctly using their new method but it is not the way tax was applied in the recent past where both taxes were calculated on the total bill AFTER discounts or credits were deducted.

 

The next day I contacted both the CRA and the BC Ministry of Finance to find out what's going on. The following is from the notes a wrote during my calls on Mar. 8/18 and I haven't yet done anything I've been advised.

 

CRA General inquiries directed me to their GST/HST Rulings Dept. 1-800-959-8287. The rep there said he can't give opinions on the way tax GST is applied by Telus as GST rules are complicated and suggested I FAX my inquiry, bill details, and Telus service agreement to 604-658-8666 with "Attention GST/HST Rulings" on the cover letter. He said It can take 45 bus. days for a reply.

 

I thought FAX was rather archaic and ask for an email address instead and was told they do not accept email inquiries unless you have a GST account, which I don't. The alternative he offered was to regular mail my inquiry and documents to:

 

GST/HST Rulings
200-1010 SM
9755 King George Boulevard
Surrey BC
V3T 5E1

 

Write "Attention GST/HST Rulings" on the inquiry letter.

 

The CRA rep further stated that if I feel that a company is not complying with the tax laws of Canada, I can contact the LEADS dept. @ 1-866-809-6841 between 8:45-4:45 EST. He added however, that the LEADS dept. does not reply back with a report or decision. They will do an audit on the company in question if they feel it's necessary. So there is no transparency in their rulings.

 

When I called the BC Ministry of Finance (PST Dept.) @ 1-877-388-4440, the rep told me that I am not the 1st person to inquire about this PST tax issue by Telus. The ministry has had several people contact them and they are investigating to find out how Telus are applying the PST because they still don't know.

 

The BC Ministry of Finance rep said I can send an email (at the address below) about the issue to be placed on a list of complaints.

 

ctbtaxquestions@gov.bc.gov

 

I can ask how PST is applied to charges on my bills and I can attach copies of my bills if I wish but it's not necessary. They will contact those on the email list after a decision is made.

 

When I asked if there had been any recent legislative changes to PST application rules, she said NONE regarding Telecommunications in the past few months.

 

So, very strange times we live in. I'll post again when I learn more about this issue.

 

 

 

 

 

 

 

 

 

Just noticed this tax issue on my April bill, but had been going on since last year.

 

I was recently offered a lower rate on internet and TV so that I wouldn't cancel and leave for Shaw.  After some back and forth with customer service it appears the issue is with Telus's treatment of discounts.    Apparently, Telus uses "credits" and not discounts to lower the monthly rate, which has tax consequences.   Credits, like a store credit, are applied after taxes are calculated, while discounts are applied before taxes are calculated. 

 

I asked Telus why they use "credits" and not discounts since it affects taxes paid by the customer, but has no apparent affect on them (ie, revenue should be the same for Telus) they couldn't tell me.  The came up with some excuse that because I was given discounts previously that I could not be given discounts again.   The other issue I brought up was that this was not mentioned during the offer.  All Telus tells you is your new monthly rate, which a reasonable person would believe is what the taxes are based on.  

 

Waiting to hear back from their L&R department to find out how to resolve this issue.

 

 

Friendly Neighbour

How Is GST/HST Charged on Volume Discounts?

For volume discounts, how you apply GST/HST to the sale depends on whether you offer the discount at the time you make the sale or after you make the sale.

 

For a discount offered at the time of sale, you charge GST/HST on the net amount (the sale price minus the discount). So for instance, if a customer bought ten dancing hula lamps that normally cost $100 each and you were offering a $10 discount on that item, you would charge the customer GST/HST on the net amount of $900 ($1000 minus the $100 discount).

 

Same situation, the $10 (or whatever amount) per month is a discount not a credit. It was offered at the time of the sale. Tax should be charged on the net amount.  A credit might happen after the time of sale... for example if the customer was a long time customer and threatened to leave Telus, Telus offered a one-time credit of $50 off the next bill... even at that situation, whether to refund the GST on the credit is still complicated and not a definite answer. 

Community Power User

 

So...... when and why would a credit be applied instead of a discount?

 

NFtoBC
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Ambassador

Be sure to double check your home services bill guys just noticed tonight my taxes were incorrect for the past two months...chat rep indicated they've had a lot of customers complain about the same issue.

 

I have also had incorrect bills the last two months. As far as I can understand, GST used to be calculated on the post-discount amount but now it is being calculated on the pre-discount amount. Did the chat rep rectify the situation? I was told that the new calculation was correct...

They are calculating the GST on the pre-discounted price. A Telus Rep confirmed this for me. She noted that this was legal and that it would continue. 

 

I guess I need to brush up on the tax code. Seems sleazy to charge tax on a price the customer isn't even paying....

Resident

I'm A BC customer and I spent the better part of the day reviewing 18 months of Telus bills.  I found two problems with the Telus charges related to tax charges for GST (5%) and PST (7%).   

 

First, the bills do not indicate which Telus services that Telus has charged 5% GST for, and which Telus services it charged 12% GST/PST.   There are a lot of service charges but the GST and PST charges are presented only as totals for the bill as a whole.  Further, figuring out what the charges required a careful review of info on prior bills.  What I realized is that most of my Telus bills differentiate tax rates for internet services without providing an itemized breakdown for those services on the bill.   That is, the premium fee I paid to have unlimited internet was not itemized, but I was able to see that Telus charged 5% GST for the unlimited internet (and 12% GST/PST for the internet service) without presenting that information in the bill itself.   By paying attention to the details, you can see how changes in discounts by a few dollars changes the underlying/ charges for unlimited internet (i.e. they are not itemized).  As  I said, it took a LONG time to figure that out and was really frustrating.  It makes understanding Telus charges practically impossible.  Not everybody has an accounting need to get the taxes right on TV charges vs. internet charges, but the Telus bills get an F in my books for providing a bill that makes it clear what we are paying for and how the charges and taxes are calculated.  

 

If you have spent time trying to understand your bill, have you been able to understand what you needed?   

 

The second problem, which I was amazed to discover, is that Telus charged more than 5% for GST on bills the company sent me in October 2017 and November 2017.   In October, total Telus charges were $72.43.  The GST should have been $3.62 but I was charged $4.31.  That's an overcharge of $0.69 for federal GST (by 19%).  In November, total Telus charges were $98.00 so GST should have been $4.90.  Telus charged $5.40.  Thats an overcharge of $0.50 (and 10%).   The inconsistency in the overcharges is very curious.  It may indicate a problem that is greater than a single line item (or underlying line item).  The amounts are not a lot of money for any one person, but after I came to the Telus forum, I discovered a number of comments about tax problems since October.  I did not see an indication of an official response by Telus (other than a second-hand report of a customer support person acknowledging the problem).  At this point, there is no explanation or fix that I can see.  

 

I'm going to wait until the next Telus bill to see whether the company stops charging me more than 5% for GST.  I'd rather not spend more time on this problem and just hope folks at Telus sort things out in short order.   

 

For BC customers:

 

Home phone:

GST = (total home phone amount including long distance - 911 amount) X 5%

PST = Long distance amount X 7%  note: residential home phone base plan and 911 amount are not BC PST taxable 

 

Internet: 

Internet cost X 5% for GST and  7% for PST

 

TV: I don't use TV so I can't comment.

 

Mobile:  5% for GST and  7% for PST

 

The cost should be based on what we actually pay, i.e. after bundle discounts and credits. 

 

 

Response I got from the Provincal Government

 

Thank you for your inquiry.

 

We are familiar with the situation you describe, as we have received e-mails from a number of other people with the same concern.

 

As background, there is an exemption from taxation under section 83 of the Provincial Sales Tax Exemption and Refund Regulation (PSTERR) for residential telephone services.  There is also an exemption for basic cableservices under section 84 of the PSTERR. However, please note that if you are purchasing Telus’ Optik TV that this will not qualify for the exemption for basic cable services, as Optik TV is delivered through an Internet connection. PST applies to the full purchase price of TV services provided through an Internet connection.

 

As discussed on page 5 of Bulletin PST 311 - Promotional Materials and Special Offers, if a vendor provides their own coupons or rebate offers (as is commonplace with e.g., grocery stores, with newspaper coupons), these reduce the purchase price for the goods (or in this case, services) being provided and on which PST is due. This reduction in the purchase price for goods or services is provided for by section 22 of the Provincial Sales Tax Act (PSTA). It seems likely that this is the type of discount Telus is providing you.

 

Only if the seller was receiving compensation from a third-party for the coupon accepted/rebate offer provided would the tax be calculated before deducting the value of the coupon/rebate offer, as per section 23(2) of the PSTA). It seems unlikely that this is the type of discount being applied by Telus. The application of discounts to telecommunication services, in particular, is discussed in more detail on pages 20-21 of Bulletin PST 107, Telecommunication Services.

 

In other words, these coupons/rebate offers being provided by Telus should, in all likelihood, reduce the “purchase price” for the telecommunication services being purchased, and should be deducted before calculating the tax due (assuming that Telus is not being reimbursed by a third party for the coupons/rebate offer).

 

It would appear, however, that Telus may be applying the PST to the initial price for all (or most) of the telecommunication services (other than those qualifying for exemption) before applying the credits/discounts (possibly after accounting for some apportioning of the discount between taxable and non-taxable services).  In other words, in effect, PST is being applied on (most of) the value of the discounts. This would be incorrect, assuming Telus is not receiving reimbursement from a third-party.

 

However, we are unable to conclusively determine what Telus is doing. It is advised that you contact Telus to get their complete explanation for their billing practices and how they are calculating the PST due.

 

If a person has paid PST in circumstances where they were not required to pay the PST, the supplier/service provider may refund the PST to their customer only if the refund is provided within 180 days of the date the PST was paid, upon presentation of the required documentation, if necessary. Otherwise, the person who paid the PST may apply to the Ministry for a refund using FIN 355 -- Application for Refund - General (PST) (and, if necessary, FIN 355 Schedule - Refund Claim Schedule (PST). In addition, please see Bulletin PST 400, PST Refunds.

 

Please note that refund claims must be received by the Ministry within 4 years of the date the tax was paid, and that the Ministry does not refund amounts of less than $10.00.

 

Please note that we can provide advice on the BC PST (and other BC consumption taxes) only. We cannot provide advice on the taxes of other jurisdictions, or the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST), as that is a federal tax on sales of goods and services. The Canada Revenue Agency (CRA) is responsible for administering the GST. For questions concerning the application of the GST, please visit the CRA's dedicated GST/HST web pages at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call the CRA at 1-800-959-5525.

 

More information on British Columbia’s PST can be found in our PST Bulletins and Notices. Our Forms Page contains exemptions certificates and forms related to registration, applying for a refund, and self-assessing the PST.

 

For additional information, including free interactive webinars, informational videos and upcoming events, please visit the PST Outreach webpage. To receive updates about legislative changes and new public information, please Subscribe To Receive Updates (click the button at the top right of the page and then put in your e-mail address on the “form”).

 

This correspondence describes how the Ministry interprets the relevant tax provisions for information purposes only. This response may be impacted by variations in circumstance, subsequent changes to legislation or subsequent court decisions. The Ministry is not responsible for updating this response if there are any subsequent changes to the law. This response is provided as an aid to understanding the legislation and is not intended to replace the legislation.

 

Rulings and Interpretations Team
Ministry of Finance
www.gov.bc.ca/consumertaxes

Lol @ the Rulings and Interpretations Team, Ministry of Finance -- some of the best long-winded gov-weaseling I've read in a long time.

Friendly Neighbour


@Lola wrote:

@Lol @ the Rulings and Interpretations Team, Ministry of Finance -- some of the best long-winded gov-weaseling I've read in a long time.



All I see is " PST is being applied on (most of) the value of the discounts. This would be incorrect ". 


@BC1 wrote:

@Lola wrote:

@Lol @ the Rulings and Interpretations Team, Ministry of Finance -- some of the best long-winded gov-weaseling I've read in a long time.



All I see is " PST is being applied on (most of) the value of the discounts. This would be incorrect ". 


"PST is being applied on (most of) the value of the discounts. This would be incorrect, assuming Telus is not receiving reimbursement from a third-party."

 

You didn't see the rest.

@Lola I need more coffee! My apologies!

 

@Victoria_ Mike that message was for you!

Hi @Lola

Can I suggest you contact our Client Care team in regards to months where the tax calculation isn't correct on your invoice? We did previously have a billing issue for this that has since been closed and rectified. You can contact them at 310-2255

I did just that yesterday Monday 23 Jan 2018. Took an hour and I was told that since October 2017 Telus has been charging gst/pst on credits, and that it was not going to change. She also said that CRA had demanded the changes!

I intend to contact the CRA to get this verified today. If not the advise I was given  was to take Telus to court. Since that is most likely the only way to get them to address this. I am going to talk with my MLA first.

 

@Nicole-Natassha

 

I'm not having an issue. Smiley Very Happy Thank you for asking me though.